Whistleblower Opportunity – Banks that Violate AML Regs

As fraudsters, terrorist organizations and crime syndicates grow more sophisticated, whistleblowers have more opportunities to earn large cash awards. Blowing the whistle on a terrorist group won’t earn you a reward, but reporting the banks that facilitate their schemes can. Specifically, banks that ignore anti money laundering regulations (also called “AML”) are ripe for whistleblower awards.

FIRREA and Whistleblower Awards

Passed in response to the savings and loan crisis, FIRREA is one of the most powerful tools that prosecutors possess. Short for the Financial Institution Reform, Recovery and Enforcement Act, FIRREA has a low burden of proof and a long 10 year statute of limitations. That is why prosecutors love the statute. Few people know, however, that FIRREA can also pay hefty whistleblower awards.

FIRREA pays awards of up to $1.6 million for information about schemes or behavior that hurt the financial stability of a federally insured bank. Even if it is the bank itself engaging in the misconduct, FIRREA still authorizes rewards.

We have seen an uptick and federal enforcement actions against banks. Frequently banks are fined because they were caught violating federal anti-money laundering rules or for facilitating Ponzi schemes.

Earlier this year, the Financial Crimes Enforcement Network (FinCEN) and the Office of the Comptroller of the Currency (OCC) fined Gibraltar Private Bank & Trust Co. a combined $6.5 million. FinCEN levied a $4 million fine for failing to stop or report $558 million in suspect transactions between 2009 and 2013. The OCC levied a $2.5 million fine for similar violations.

Gibraltar Private Bank & Trust Co. is a tiny bank located in Coral Gables, Florida. Gibraltar and TD Bank were the two primary bankers for now convicted Ponzi scheme fraudster Scott Rothstein.

Gibraltar was owned partially by Rothstein. Today Rothstein is serving a 50 year prison sentence for running a $1 billion Ponzi scheme from his now shuttered law firm. Banks that look the other way when big investors engage in misconduct are just asking for trouble.

The Bank Secrecy Act is an anti-money laundering measure that requires banks to file Suspicious Activity Reports when certain thresholds are met. These reports give feds an early heads up of behavior or activity that should be investigated. While the filing of a Suspicious Activity Report does not mean a crime has occurred, the reports put Treasury investigators on notice. Had Gibraltar filed timely reports, Rothstein’s crime spree might have been stopped long before his losses approached $1 billion.

In levying the fine, FinCEN’s director Jennifer Shasky Calvery said, “We may never know how that scheme might have been disrupted had Gibraltar more rigorously complied with its obligations under the law. [Gibraltar’s] failure to implement and maintain an effective AML program exposed its customers, its banking peers and our financial system to significant abuse.”

It is the latter part of Director Calvery’s statement that allows FIRREA to pay whistleblower awards. By endangering itself and the banking system, the bank’s failure to follow AML rules created the perfect whistleblower opportunity.

The explosion of anti-money laundering enforcement actions has caused banks to suddenly hire hundreds of compliance officers. Unfortunately, the same banks that hire these compliance officers frequently ignore what they have to say. As more compliance officers are ignored – or suffer retaliation – we expect to see a new wave of FIRREA whistleblowers. Unfortunately, few people within the banking industry even know about the handsome awards available under the statute.

MahanyLaw – Lawyers that Represent Bank Whistleblowers<h/h4>

MahanyLaw is a boutique national law firm that represents whistleblowers. Although we handle all types of whistleblower cases, we are best known for cases against big banks and financial services companies. Our successful action against Bank of America resulted in the largest civil recovery in history against a single defendant, $16.65 billion. It also resulted in tens of millions of whistleblower award monies being paid pursuant to FIRREA and the False Claims Act.

If you are a bank compliance officer or have inside information about banking misconduct, call us. We have the experience, knowledge and drive to help our clients get the highest possible awards. And we don’t back down when facing off with big banks.

For more information about earning your own financial award, contact attorney Brian Mahany at *protected email* or by phone at (414) 704-6731 (direct). You can also visit our financial fraud whistleblower information page.